Economist criticises government stimulus package amid rupiah weakness

Jakarta - The government has prepared various economic stimulus measures for the second half of 2026, including transport fare discounts, tax incentives for writers, and national internship and vocational programmes. Wijayanto Samirin, Senior Economist at Paramadina University, said the stimulus package is too small to support the economy amid rupiah pressure and global uncertainty. ‘The stimulus is too small and cosmetic for the challenging economic situation. More substantive and larger measures are needed,’ he said on Thursday, 28 May 2026. He added that while social assistance and tax incentives may currently be effective, their impact would diminish if the rupiah continues to weaken, leading to high cost-push or imported inflation. ‘Social assistance cannot counter this, especially given the government’s limited fiscal capacity,’ he said. Samir also questioned the government’s optimism that domestic consumption stimulus would sustain economic growth, calling it unrealistic. ‘Sustainability is more important now than breaking records if it relies on debt, compromises legal certainty, and future prospects,’ he added. He highlighted the government’s claim that work from home (WFH) policies have reduced subsidised fuel consumption by nearly 9%, but argued that all stimulus measures have failed to offset the economic slowdown caused by increased market uncertainty following the announcement of a new export body.